Financial History Issue 125 (Spring 2018) | Page 19

Wall Street’s “Weak Link” WILLIAM HEATH Before business opened on the Stock Exchange yesterday morning rumors were rife that a great failure was imminent. For reasons that were appreciated in Wall-Street it was quickly concluded that the weak firm was William Heath & Co., of No. 78 Broadway. The anxiety of that house’s customers was not long in making itself felt. Demands poured in on the firm for settlements of various kinds and for immense sums. The result was shown in the prompt announcement of Mr. Heath in a letter to the Exchange that his house was unable to meet its obligations. The New York Times October 3, 1885 Scene in the Gold Room during the panic on Friday, September 24, 1869. By Julia Bricklin One of Wall Street’s brightest stars in the mid-19th century was William Heath, founder of the eponymous Wil- liam Heath & Co., a brokerage that had offices in New York and London. In his early 20s, the Massachusetts native was better known as the “American Deer.” At six foot, six inches tall, gaunt and angular with a drooping moustache, Heath cut a conspicuous figure on Broad and Wall Streets. In the early to mid-1860s, he was a famous “pad-shover,” a messenger that raced between the Exchange and the broking houses who carried pads of paper from place to place upon which were writ- ten current prices of various securities and buy and sell offers. The nickname “American Deer” — or sometimes “American Reindeer” — fol- lowed him even as his offices and position in life became bigger and loftier. But soon, Heath’s fame for his quick maneuvering, photographic memory and market astute- ness would turn into notoriety, as his increased bear speculation with the likes of Jay Gould and Jim Fisk would cost him his business, his wealth and his life. “In an age without tickers or electric- ity,” writes E.H. Harriman biographer Maury Klein, “the brokerage business was a gigantic paper chase. Being a pad-shover offered any bright, alert boy the chance to observe every aspect of the business from the purely technical nature of how transactions were made to the psychology of behavior under stress as revealed by the men who gave and received orders.” Still, Heath and the more sophisticated of his peers lost their jobs in 1867. The speed of Edward Calahan’s ticker inven- tion was far faster than notes delivered by human muscle. Thus, at age 29, Heath decided to join the Open Board of Bro- kers, which merged with the New York Stock Exchange in 1869. Heath was born in Brookline, Massa- chusetts, to Charles and Caroline Heath. His father was a broker, and son quickly took to the excitement of it. In his mid- teens, the younger Heath trained with the banking house of Blake Brothers & Co. and then began trading with James Mur- ray Howe & Co., both in Boston. In 1860, he accepted a position with Nevins & Co., as their New York representative, and he took an office there at 38 Pine Street. It was there that his athletic price running made him famous in Lower Manhattan. In early 1867, Heath formed his own brokerage firm, with another gentleman named James Ellis. The pair did quite well, offering careful yet bold speculative oppor- tunities to customers who wished to invest in America’s financial reconstruction  |  Spring 2018  |  FINANCIAL HISTORY  17